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About the Author

Kae-Por Chang
Managing Director
Amber Road, China


Kae-por Chang is the Managing Director of Amber Road China, formerly EasyCargo. He is responsible for Amber Road operations in China, and has led teams to enable multi-national companies to incorporate on-demand China Trade Management (CTM) solutions into their daily supply chain operations since 2007.

Prior to Amber Road, Kae-por has over 20 years of experience in global supply chain management, logistics, and regulatory compliance, both as an Ernst & Young consultant in Boston and as a hands-on senior executive at Starter Corporation and Imagitas, a Pitney Bowes company. Mr. Chang received his master's degree from Dartmouth College and was certified by APICS at the CPIM level.

For more information, please visit www.amberroad.com


Supply Chain Comment

By Kae-Por Chang, Managing Director, Amber Road China

June 26, 2014



Lowering Costs with China Trade Management

Total Costs are Greatly Influenced By a Company's Capabilities to Manage its General Trade, Processing Trade, and Bonded Zone Operations in China


Chang Says:

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A well-developed CTM program can be a strategic advantage, enabling a more efficient, cost effective, and seamless supply chain. However, creating a solid CTM program requires input and focus from senior management.
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The total costs to conduct business and supply chain operations in China for multi-national companies are greatly influenced by a company’s capabilities to manage its General Trade, Processing Trade, and Bonded Zone operations in China.

Processing Trade, for example, affects companies that import materials and components into China and use those materials and components to manufacture finished goods for export to foreign markets. When properly administered, Processing Trade transactions are exempt from import duties and value-added-taxes on export. Utilizing the Processing Trade program can reduce product costs and increase working capital efficiency by 25 percent or more.

However, many companies today lack the compliance infrastructure, tools and technology needed to effectively lower the total costs for their trade operations in China. One way to address these costs and complexities is by utilizing a China Trade Management (CTM) solution. CTM automates import and export processes for all China operations, allowing companies to meet China’s compliance requirements while reducing costs, enhancing supply chain efficiencies, and ensuring uninterrupted trade operations via timely regulatory updates.  Below are seven best practices for effectively implementing CTM for maximum value.



1.

Clearly define the roles and responsibility between corporate and facilities. Many companies lack a clear understanding of their true global supply chain capabilities, critical for proper planning. Similarly, many companies aren’t aware of what tools, processes and people are needed to effectively implement a CTM program. The first step in creating a successful program is establishing what functions are needed, and then assigning roles to corporate and facilities as appropriate.

2.

Establish corporate compliance policies and objectives. By applying the 80/20 rule and clearly defining corporate compliance policies and objectives, each facility can quickly devise its own CTM practice to meet its specific requirements based a consistent corporate framework.

3.

Invest in a China Trade Management (CTM) solution. Companies can identify patterns and promulgate best practices at the operations level.  But without an effective CTM system solution with continual regulatory updates, companies face unmitigated compliance risks, clearance delays, unnecessary supply chain impacts, additional tax payments, inefficient operations, and an inability to respond to government agency audits. A comprehensive CTM solution gives people the tools they need to do the job right the first time, every time.

4.

Create protocols to manage service providers.
By extending purchasing and compliance processes and developing a set of rules and regulations to determine how data is transmitted to inbound trading companies, companies can shorten cycle times, improve service levels, lower supply chain execution costs, and better support compliance initiatives. These protocols should include service provider qualification; expense management; audit measurements; and regular performance reviews.

 
5. Conduct regular internal audits. Global trade operations consist of complex, interconnected systems that must be managed by establishing key performance indicators, analyzing results and developing strategies to continuously improve performance. Internal audits can serve as catalysts for improving an organization's governance, risk management and management controls; making data-driven decisions; and shifting from tactical decision-making to continuous improvement programs. Establish performance measurement systems as the basis for internal audit and continuous improvements.

6. Leverage CTM expertise within the company. Knowledge of CTM practices is more important than ever, particularly for companies operating with limited resources. A strong CTM program effectively and efficiently utilizes the expertise of compliance professionals within the company and provides them with the necessary tools and technology to conduct business.

7. Establish the CTM infrastructure to meet performance objectives. Your CTM approach should be aligned with the company’s overall goals. Performance objectives should be defined and measurable and allow for continuous process improvement. Compliance requirements should be incorporated into strategic and daily supply chain operations.


Final Thoughts


In summary, a well-developed CTM program can be a strategic advantage, enabling a more efficient, cost effective, and seamless supply chain. However, creating a solid CTM program requires input and focus from senior management. The causes of most issues in a CTM program occur before a product is shipped – or even made. Simply asking the import/export department, the last touch point of the process, to alone be responsible for executing the CTM program will most likely produce unsatisfactory results. Lastly, every company is different. But, the goal is the same to power global trade in China faster, better, and cheaper.


Agree or Disagree with Our Expert's Perspective? Let Us Know Your Thoughts at the Feedback section below.

Recent Feedback

It's really good article to summarize the cores of China trade management from strategic and tactical point of view. Hopefully CTM solutions can be more powerful and intelligent to realize systematic and compliant China trade functional management.


Leah
Customs affairs
Customs affairs
Jul, 03 2014
 
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